HOA lien in Colorado

[Allan Tamez]

In the state of Colorado - if I were to buy a foreclosure HOA lien for $9,500.00 and the property value is $165,000.00... What would happen to the first and second mortgages?

[Dan Mackin]

As Bill stated the second can pay you off and retain their interest. When you purchase an HOA lien of that value it's almost definitely over 6 months late. Following Linda's note, 6 months (plus attorney fees, and some other items) becomes the first position behind tax liens. The remainder goes into last position for the day it is filed. So if there is a first and second mortgage on the home at the time the HOA lien was filed then you would hold 1st and 4th position. If there is just a first mortgage then you're 1st and 3rd position. You can attempt to use these positions to negotiate with the lender to pay the lien off and take possession. This of course is all situational and you should really evaluate each one individually. Lots of times it's unlikely the bank will play along and will just pay you off. If you want the best situation then you purchase HOA liens where there is no mortgage. Then of course you have to be the one foreclosing. I for one am not really a fan of that method, but to each their own.

None of this is legal advise. These are just points I have slowly been discovering while digging into this same topic. If you have a situation that you're really curious about then call your attorney to run it past them.